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Corporate integrity agreements undergo new changes

Department of Justice increases its flexibility in negotiating new agreements, experts say

Hospitals that are in the process of negotiating a corporate integrity agreement (CIA) or operating under an existing agreement should be aware that both the negotiation of these agreements and their enforcement continue to undergo important changes. "It is not business as usual with respect to CIAs," warns Brent Saunders, director at PriceWaterhouseCoopers in Washington, DC.

Former U.S. Department of Justice attorney John Bentivoglio says the good news is that the Department of Health and Human Services’ Office of Inspector General (OIG) has added substantial resources to the units responsible for negotiating and overseeing compliance of CIAs. "That should be good news because it will likely increase their flexibility and willingness to tailor agreements to meet unique circumstances," he explains.

Charles Murdter, a health care attorney in Davis Wright Tremain’s San Francisco office, says he is seeing this new attitude already. "The current posture of the general counsel’s office at the OIG is tough but fair," Murdter asserts. "I am seeing a little more flexibility from the OIG in trying to craft the terms of an integrity agreement to match the capacity and the needs of a particular provider."

Bentivoglio says the bad news is that the OIG now is making good on its plans to carefully monitor compliance with corporate integrity agreement. "The level of scrutiny that providers can expect will increase, and the likely consequences for violating their corporate integrity could be quite severe since they will be repeat offenders in the eyes of the OIG," he asserts.

Saunders says he already is seeing that. Not long ago, he says, annual reports required under a CIA would be submitted to the OIG, and no response would even be generated. "It was like sending it into the black hole," he asserts. "That is not the case today."

Today, he says, the OIG is not only reading these reports but responding to them. "I have several clients that have had spot checks and audits done randomly and unannounced with very little notice," he reports. "The government is taking them much more seriously and holding providers to the terms of the agreement."

Rauzi says much of the documentation and many of the provisions for CIAs remain similar across the board. But he adds there are typical and atypical agreements, and hospitals in the process of negotiating should examine the CIAs for Columbia/HCA and the second agreement for the University of Chicago as examples.

"The reason those [agreements] are very interesting is that they recognize that absolute perfection is not attainable," says Rauzi. The second University of Chicago settlement is a case in point, he says. The issue there is evaluation and management codes, which physicians use to describe office visits. "There is just total confusion about how those things should be coded, and you can never get it completely right," he explains.

Another trend that Murdter reports is what he calls individual integrity agreements. "The whole fraud and abuse enforcement effort is now filtering down to the individual provider level," he says. In some instances, that means that individual providers are now signing those agreements.

Murdter says those agreements tend to be modeled after the compliance plan promulgated last summer for physicians and small group practices. On the whole, these agreements are not as burdensome as typical CIAs.

Others say the best CIA is no CIA at all, and sometimes that it is achievable. According to Chris Ideker, a partner with Ernst & Young in Atlanta, a case in point is the University of California, which recently settled a Physicians at Teaching Hospitals (PATH) investigation for $21 million with no CIA. "I question after this California settlement whether a PATH settlement will ever have a CIA again," he asserts. "I would think any attorney negotiating on behalf of an institution is going to try to avoid one."

He says taking this route raises the question of whether the institution is going to give up its waiver of permissive exclusion. But he predicts many academic institutions will take that risk, believing there is little chance the OIG is going to exclude them anyway.

But even as some areas such as PATH investigations recede in importance, others are receiving more scrutiny. Gregory Warner, director of compliance at the Mayo Foundation in Rochester, MN, says one such area is quality of care.

Some recent CIAs have included quality issues, he notes. "It will be interesting to see how much more that happens," he adds. "That will be another new and interesting twist to the expanding role of a compliance officer."

Bentivoglio warns quality-of-care cases often merit more novel provisions that achieve patient protection goals than a straightforward financial fraud case. "At the end of the day, you have to make the substantive case about why it is appropriate from a law enforcement program integrity and patient perspective," he says.

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